Illinois is going to try introducing a heavy cigarette tax to help fund their medicare liabilities.

However they ignore the history of such leaps. Typically a small tax gets a revenue increase but a medium or high tax increase actually reduces revenue. Of course this does not apply outside the United States and the European Union.

So now some liberals here are thinking 'he is stupid of course they increase revenue'. A pack of cigarettes has a cost. A carton typically holds ten packs.

Look at this website:

http://www.theawl.com/2011/06/what-a-pack-of-cigarettes-costs-state-by-state

So people in Washington are paying $99 to Oregon's $56 for a carton. If you plan to buy a bunch of cartons to save money (say 5 like my mom used to do, she even put several cartons in the freezer) then it changes a lot more... to $496 to $280. Suddenly a hundred mile round trip drive seems a good way to save money. So let's say they drive a car which gets 20mpg. That's 5 gallons and even if $5 a gallon for gasoline... that is only $100 in cost compared to $216 in savings. Net result is you save $116 dollars and Washington State loses taxes while Oregon gains taxes... (btw this is built upon a real life dynamic I know of. No one in Vancouver buys cigarettes there unless it is an 'emergency' to them or that they won't have time for a trip to Oregon.)

Not only that dynamic.. but then there is the people that quit due to the increased cost. Suddenly you have less people buying in State and less smokers in total as well.

This is why taxing smokers should only be to help stop them from smoking or to pay for THEIR smoking related healthcare. Trying to bridge a gap in your budget on smokers (or drinkers) is bad fiscal policy and is sure to result in less revenue (every example shows this)